ECONOMY

PASOK officials defend the party’s economic policies

For the first time following the March 7 election, officials of the Panhellenic Socialist Movement (PASOK), which was in power continuously from October 1993 until early this month, have undertaken a sustained defense of their economic record, assaulted by the present government. PASOK Secretary-General Michalis Chrysochoidis and former Economy and Finance Minister Nikos Christodoulakis claimed that PASOK left the economy in as good a state as possible for conservative New Democracy to lead further toward development and convergence with the economies of the other eurozone members. Chrysochoidis referred to the interim economic report by the Bank of Greece, published on Monday to back his claims. «The report confirms that Greece’s economy is in fine shape… the policies followed by the PASOK government over the past five years have set the foundations for stable and sustainable growth,» Chrysochoidis said, adding that – according to data provided by Eurostat, the European Union’s statistics agency – at the end of 2004, the per capita income in Greece will reach 76 percent of the EU average, from 66 percent in 2000. Chrysochoidis also referred to low inflation and a drop in the unemployment rate and asked whether New Democracy was going to follow the recommendations of the Bank of Greece for a more restrictive fiscal policy. New Democracy has, over the past few years, accused PASOK of hiding the extend of budget deficits and understating the public debt using various financial tricks. Last year, Eurostat obliged Greece, and five other EU member states, to include certain financial operations in their budget deficit and in the total debt, turning what was to be budget surpluses from 2001 into deficits and adding more than five percentage points to the country’s public debt. As soon as New Democracy took power, Christodoulakis’s successor, Giorgos Alogoskoufis, canceled a decision by Christodoulakis to transfer VAT revenues from the last quarter of 2003 onto the 2003 budget instead of to the 2004 one, as was usually done. This transfer was partly responsible for the 2003 budget deficit’s soaring from about 1.7 percent of GDP to over 2.7 percent. Christodoulakis defended the initial transfer, saying it was completely legal and accepted by the EU. He accused Alogoskoufis of deliberately overstating the 2003 deficit in order to shore up the 2004 budget whose revenues, he said, were endangered by the new government’s ambivalent stance on tax inspections on businesses.